EXECUTIVE SUMMARY The new millennium has thrown open new prospects of growth and economic development.

Financial Reforms and opening of the Economy to Foreign Forces have thrown up new challenges and opportunities. New economy stocks of knowledge based industries and services have shot into prominence. Operations in financial markets have acquired new dimensions of greater risk and volatility. Principles and Practices of Security Analysis and Portfolio Management have assumed new significance in the above context. This project combines the aspects of banking industry with the security analysis. In this project we have tried analyze the banking securities listed on BSE using the principles and practices of security analysis. The project starts with the introduction of the banking industry. It gives the reader insight into the history of the Indian banking industry and present status of the Indian banking industry. In addition to this, it also gives a brief view of main elements of emerging banking in India. The next section describes what the portfolio management is and the main objectives behind the portfolio management. The strong link between economic activity and security prices requires that the investor forecast the direction and degree of change in economic activity. The Indian economy has been analysed in the third chapter of this project. For analysing the economy different parameters such as monsoon, GDP, inflation rate, interest rates, forex reserves, fiscal deficit and monetary and credit policy have been used. This section gives us the outlook about the Indian economy for the near future. Key sectors of overall economic activity influence particular industries in different ways; the investor must link forecasts of economic activity to the prediction of relative movements in specific industries and analysis of selected industries. The chapter four deals with the analysis of Indian banking industry. it includes different aspects of banking industry such as the structure of banking industry, cost dynamics, current scenarios, government policy, RBI regulations, etc. from all these aspects we have tried to forecast the future of the banking industry. The next chapter, chapter five, gives the financial data of twenty four banks listed on BSE. This financial data gives an investor the information of banks which one must have while deciding to invest. It also gives some ratios and

shareholding patterns of the banks. On the basis of this information, we have selected few banks to analyze and find out the best bank to invest. From the industry level to the level of individual companies, the investor must examine and analyze factors that influence earnings, dividends, and stock prices of companies. The chapter six explains how we can carry out the fundamental analysis of individual companies. It also includes the complete analysis of four selected banks. Theses analysis include the ratio analysis, projected financial statements and application of the stock valuation models to these four banks. This section also includes the comparative analysis of all the four banks.